I want to make a Final year engineering project in Blender. What is the scope of Blender?
Blender can be used for geometry creation and visualization. The geometry can be manually entered or imported and manipulated using Python. Using Python, blender can interact with data in the real world. The cycles rendering engine implements ray tracing and can replicate optical behavior. There are several built in simulators, however they are intended for animation, not engineering. There are two different fluid simulators (Lattice-Boltzmann and SPH). There is a solid body simulator that includes mechanical constraints. The scripting capabilities make it straight forward to couple other simulations to Blender. Since Blender is open source you can access the source code and extend the built in simulators. From these basic capabilities many different engineering things can be done. The list below shows some places to look for ideas. Good luck!


Visualization


Scientific Visualization in Blender
Post process CFD data
Create and visualize "computational cell biology"       
Astronomical data
Plotting data
Plotting functions

Image processing
Augmented reality
Particle Tracking  Velocimetry
Real-time sensor visualization
Psychology testing
Engineering
Robotics,more
Real-time audio spectrum visualization
3D Printing
Automotive design at Tata
Dental appliance design
Design a fixture for spinal surgery
Aerodynamic geometry case preparation for CFD
CFD visualization
Industrial fire simulation
Simulation sensor imaging
Thermal radiation shielding design
Structure solar radiation simulation
Simulate soil optical properties, more
Synthetic aperture radar simulation
... and lots more